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Wednesday, November 5, 2014

Can You Build an Economy and Save a Life at the Same Time?

In the Intelligent Community of San Francisco (Smart21 of 2007), about 3,000 people work in high-tech manufacturing. The city may be obsessed by software these days, but advanced manufacturing generates about $1 billion in direct and indirect revenue for the local economy.

It also saved a man’s life.

His name is Marc Roth. According to a wonderful article by Jason Shueh in GovTech, Marc was a successful entrepreneur in Las Vegas, where his patented touchscreen technology was used to process taxi fares. Beginning in 2008, however, the financial crisis ran through Las Vegas like a river in flood and took the travel industry – his customers – with it.

In 2010, Marc decided to repair his fortunes by moving to San Francisco. He was sure of landing a good software engineering job earning six figures, and his wife and children would then be able to follow him there.

Instead, he wound up living in his car. Entrepreneurship turns out not always to be a good thing on a resume. Potential employers believed that he would stick around only long enough to line up his next business opportunity.

He worked in a pizza restaurant until nerve damage from long hours on his feet made it impossible for him to do the job, or most other manual labor. One day, his car was robbed and all his possessions stolen. That night, in mental and emotional agony, he checked into a homeless shelter. It felt like the end of the road and he contemplated suicide. But day after day, he decided to put it off for one more sunrise.

On one of those dark days, he found an advertising flyer in a trash can that offered a one-month membership at something called the TechShop. Mark did not know it then but it is the hub of San Francisco’s Maker Movement, which supports community-driven manufacturing design and production. Marc’s flyer got him access to a facility with more than a million dollars in prototyping equipment.

Marc took classes, mastered the equipment, and soon found himself being hired by young entrepreneurs to help with their prototype projects. Then TechShop offered him a teaching position. Months later, a friend, whom he had met at Techshop, paid for him to move into a “hacker hostel” for tech entrepreneurs. Shortly afterward, an investor put money into SF Laser, a laser cutting and etching company that Roth had founded. Eighteen months after he first checked into the homeless shelter, Marc was finally able to bring his family to San Francisco.

Innovation is the lifeblood of the modern economy. Intelligent Communities pursue innovation through a triangular relationship between business, government and such institutions as universities and hospitals. (See our book Brain Gain for more.) The Innovation Triangle helps keep the economic benefits of innovation local, and creates a culture that engages the entire community in positive change. Maker spaces like TechShop often plan a vital part.

But sometimes, economic lifeblood turns out to be no different than the blood running through a man or woman’s veins. Marc Roth owes his life to TechShop – and in gratitude, he founded a nonprofit called the Learning Shelter, which teaches trades to people as homeless as he once was. San Francisco has gained something even more valuable than another startup – a citizen determined to leave the city better than he found it.

Monday, October 6, 2014

Why the Next Wave of Automation May Replace Your Boss

Say what you like about McKinsey & Company, the global consulting firm. Say that they get magnificently overpaid to offer sensible advice. Say that they function all too often as a Band-Aid that CEOs and Boards of Directors slap onto their companies after they have gotten into terrible trouble.

But the guys and gals at McKinsey can still think. For their 50th anniversary, McKinsey published a special issue of their Quarterly magazine. In it, they talk about the coming impact of smart machines on organizations – and offer a surprising take on an very old problem.

As we detail in our book, Brain Gain: How Innovative Cities Create Job Growth in an Age of Disruption, ever-smarter robots and software have a long history of replacing people at work. It began in factories in the Industrial Age and continued in offices in the Information Age. Bosses keep doing the arithmetic. When the cost of a machine that can do a person’s job falls low enough, buying the machine makes more sense than paying the salary. It is this trend, taking place decade after decade, that has eroded a middle class built on low-skilled jobs and is making the creation of a knowledge-based workforce a matter of survival for communities in developed and developing nations.

McKinsey’s surprising prediction is that, in coming years, smart machines will invade the executive suite. Much of the work of bosses, including that dismal arithmetic, will be automated.

It’s already happening, according to the company. Google’s “human-performance analytics group” uses algorithms to decide which interview techniques are best at choosing good employees and what to pay them. A venture capital firm in Hong Kong, with the hip name Deep Knowledge Ventures, has appointed an algorithm to its board of directors. It gets a vote on what companies to invest in.

What will be left for managers to do in this new wave of automation? The things that human beings still excel at. Andrew McAfee of MIT is quoted in the report as saying, “I’ve never seen a piece of technology that could negotiate effectively. Or motivate and lead a team.” Automation on the factory floor separated out the simple, repetitive tasks and assigned them to machines. The same thing will happen to the simpler and more analytic tasks on the boss’s desk.

So, all those workers who have lost jobs to automation can raise their glasses to the new class of smart machines that are giving them some payback at last.

Managers who want to keep their jobs will have to rethink how they add value to the organization, while communities will need to take their work on increasing the skills of the workforce to a whole new level.

But in the end, we may all benefit from smarter machines in the executive suite – if it leads to smarter, more informed, less political decision-making at the top.

Wednesday, October 1, 2014

When a Community Cured Cancer

In 1976 nine different doctors around Boynton Beach, Florida (USA) sent Stamatis Moraitis back home to his wife to die. Stamatis, who was born on the Greek island of Ikaria and had immigrated to America on the Queen Elizabeth (when it was converted into a troop ship in 1943), had lung cancer and would not last the year. He had to make choices. He could undergo brutal rounds of chemotherapy and experience the applied medical technologies available for management of his fatal disease, or he could wait it out and let the disease take its course. He considered staying in his adopted country to undergo aggressive treatment but chose the second option but with a twist. Another treatment came to mind. Going home. He packed his bags and returned to Ikaria, his native home, to be buried with his ancestors and surrounded by living friends. As Bob Dylan wrote, “When you’ve got nothing, you’ve got nothing to lose.”

Stamatis spent his first few days home in bed. His mother and wife tended to him as he lay dying. He got his affairs in order and got closer to the Almighty. His grandfather had been a Greek Orthodox priest and so it was perhaps easier for him to reconnect with the faith of his tribe. His friends, hearing he had moved back to Ikaria, visited every day, and every day they drank a bottle (or two) of local wine together. “I might as well die with a smile on my face,” Stamatis told a friend. His diet consisted of the standard regional diet: vegetables from the garden, greens and olive oil. This routine persisted. He slept long hours and, comfortable in the beautiful place he felt truly his home, he waited for the great departing.

You already have guessed the rest of my story, or have read about Stamatis and Ikaria, where, according to a study by National Geographic and the writer and researcher Dan Buettner, people, on average, live longer than in any other place. Mr. Moraitis’ year of being terminal came and went, and then more followed. Many of them. Two years ago the former manual laborer celebrated his 97th birthday (he claims to be five years older than that, but no one can prove it) and remains cancer free. No chemo, no drugs, no operations. He went back to the USA to pay a call on his doctors recently, but they were all dead.

What was his “cure?” We know from the medical books that spontaneous remissions, while rare, do occur. And scientific literature, including the work of cancer surgeon Dr. Bernie Siegel (Love, Medicine & Miracles) increasingly cite case histories of patients far outliving their diagnoses through a combination of means. The fact is, however, we do not know. What we do know is that he returned to Ikaria where, as the cliché goes, “life got simpler.” Researchers note that 96% of the people who live there own their own homes. There may a clue linking this to longevity. My own mother is 90 and, despite my insistence long ago, lives in the family home and neighborhood where she has lived for 60 years. She does fine. But this is not a formula. Or is it?

First, life is not simple. It never was. It may be more distracting today than ever. Yet for most everywhere in the developed world, and for more people than at any time, according to the Gates Foundation, Life is a lot easier than it ever was. Good for us. Surely technology helps.

But longevity of the Ikaria type cannot claim technology as its only medicine. The director of the new film, Zero Theorem and Monty Python creator Terry Gilliam says, let’s use technology, not worship it. Why? Because a smart community, where trains run on time and speeds are faster, is not the holy grail of the human community. Neither was the discovery of fire and neither was the discovery of iron. They helped us (better steaks and better steak knives resulted) but they did not allow us to live in a way that delivered that deep peace that so far few really know. During the 1930’s leaders In Italy and Germany rationalized the rise of Fascism by noting that “the trains would run on time;” that there would be modern roads and more telephones. The armies of Europe and Imperial Japan were “mechanized” and the idea of a strictly ordered society was, for sure, the cure of all social ills. Google “the Second World War” and draw your own conclusion about promises that trains running on time will have the same effect on your life as, well, two bottles of wine each day with people who really care about you.

There may be broadband on Ikaria, as there is in Okinawa, Japan, the Nicoya Peninsula of Costa Rica and among the Seven Day Adventists’ community of Loma Linda, California. There should be. It is the new fire and iron and railroad. Yet these are each communities where longevity statistics blow away international averages. So while there may be IP-based LED lighting and sophisticated water management systems in these places, as there are in many “smart” communities, what seems missing is what the people of Ikaria may have found. And that is a deeper intelligence. A more holistic one. More social cohesion and “advocacy.” A collaboration so old it is new. Said Stamatis, “Here is not a ‘me’ place. It is an ‘us’ place.”

Linking olive oil and to a vanishing adenocarcinoma diagnosis is a stretch. So I have a theory of what cured Stamatis. It was home. H-O-M-E. As in No Place like It. He went to where he could be full; where life and death were twin dancers. The man cured himself by rediscovering an intelligence that only the most perceptive physician could have proscribed. One that studied medicine and poetry. While most simply prefer to look at the “data” and give us the hard facts, others see something else.

Last year, as we studied culture and its impact on communities, I found so much depth and wealth in these communities. In Toronto I saw an area (Regent Park) resurrected by art and the local community. Poetry has sung of resurrection for a long time. And also insurrection when resisted or smothered. Ask the people in Hong Kong this week how far economic success and technologies go when freedom of expression and their culture of community are threatened. You only get rid of a disease by first identifying it. Then you return home.

On 21 October we name our new Smart21. During and after the announcement you will hear a lot about the use of technology, broadband, the Internet and the fruits of success that planning enabled in these wonderful Intelligent Communities. One of these will succeed Toronto as the 2015 Intelligent Community of the Year. It is exciting. You will read about best practices and you will get a chance to study the progress of them all, including the sustained progress of the few communities in the group who, if history repeats, will make a return to our list. We shall see.

What I will be looking for is what I always look for: their poetry. Their ability to provide not only high-speed access, manage open data and smoothly deliver administrative services, but also whether they have a voice with which to call to their sons and daughters back from the brink – whenever they find themselves there - and to invigorate them with a new life. That is the “revolutionary community” I will be telling you about over the next year. It is spelled: H-O-M-E.

It is well known that Winnipeg is at the epicenter of North America’s geography. Even its Centerport concept, a major inland multi-modal logistic initiative places itself smack dab in the center of North America. Nobody can claim that better than Winnipeg. As self-described by Winnipeggers, it is also a physically isolated city in the cold weather climate of Canada that has produced an interesting and unique culture that celebrates its diversity as well as its isolation. Some would say that this is the reason for its locally collaborative and internationally competitive “can-do” attitude. It is the capital of a province rich in agricultural and natural resources and has advanced infrastructure, including access to broadband and Wi-Fi mesh that a large city of its size would be expected to have. But as the largest and main city in Manitoba, Winnipeg seems to be much bigger than its 800,000 population would suggest. It actively pursues economic growth through innovation and collaborative industry, government and education partnerships.

style="float: right;" hspace="6"For instance, Winnipeg has formed partnerships linking employers such as Canadian Tire to the University of Winnipeg and other public-private groups to improve and leverage its supply of young, skilled employees. Through these partnerships it also attempts to better equip its large and growing aboriginal population for opportunities to prosper. One of these public-private R&D partnerships, the Composite Innovation Centre (CIC) has developed high-performance composites based on agricultural materials such as hemp and flax, which reduces costs for major employers like Boeing and Magellan Aerospace. Through CIC’s success, a national consortium, Canadian Composites Manufacturing R&D was created to conduct pre-competitive R&D for multiple companies and training programs channeling new talent for these partnerships.

From a knowledge creation and innovation perspective, Sisler High School’s Digital Voices Project promotes traditional storytelling as a vital part of its aboriginal culture, while providing students with digital media skills training. The Wii Chiiwaakanak Learning Centre provides aboriginals and immigrants’ access to computers and training while the Winnipeg Library and private sector programs similarly provide access to technologies and training. The First Nations also benefit from the Aboriginal Peoples Television Network (APTN) headquarters in Winnipeg. It is the first national aboriginal TV network and its social media offshoot, APTN Digital Drum, allows aboriginal youth to express their cultural identity and connect with each other. Winnipeg is also home to North America’s oldest ballet company, famous musicians and a vibrant center for the arts and culture movement, molded through its isolation and pioneer spirit.

So does its isolation help in creating Winnipeg’s “can-do” attitude? Certainly it reflects its focus on being ambitious and successful, despite its location “in the middle of nowhere”. It also gives it a unique position to be bold and seek its position globally as a city to be reckoned with.

I had an opportunity to visit Winnipeg earlier this year as part of the ICF Top 7 Intelligent Communities Site Visits. I was given first-hand exposure at this can-do attitude, from the exciting maker spaces for its new entrepreneurs to the wonderful cultural facilities of the First Nations. But nothing that I have seen in several years can compare to the audacious and controversial Canadian Museum for Human Rights, which will open its doors in Winnipeg on September 19, 2014. This awe-inspiring complex looms over this Intelligent Community like a cultural temple. This $351-million museum is massive in size (2230 square meters) and has been compared to the Guggenheim Spain in Bilbao for its potential impact on the city’s tourism industry and its global brand. I would agree. It clearly is humbling as you enter the building from below and rise to a crescendo into the bowls of the building with its airy interior and sculpted spire.

As ICF’s theme for 2014 was Community as Canvas, it was most appropriate to visit Canada’s first national museum to be built since 1967 in Winnipeg. As national museums go, they usually are located in a country’s capital or largest cities, yet here it was – the first national museum to be established outside the Ottawa region. The purpose of the museum is also quite inspiring. It is the only museum in the world devoted to engaging visitors in the topic of human rights as an issue and aspiration, as opposed to focusing on a specific event, movement or victims.

Designed by architect Antoine Predock, my hosts refer to its design as a reflection of the prairies and the mountains of this nation, its reach to the clouds and its important position on this historic site on First Nations treaty land. The interior is open and bright with exhibitions developed by some of the world’s top museum designers, such as Ralph Appelbaum who designed the Washington D.C. Holocaust Memorial Museum. The Canadian Human Rights Museum also created new ways to design, bid and construct the complex through collaborative technologies. The extreme geometric complexity made virtual design and collaborative construction techniques necessary. High speed broadband capabilities, evolving technology and global collaboration became essential for detailed pre-planning and visualization of its complex construction.The project team overcame logistical challenges through real-time collaboration linking Winnipeg with Toronto, New York and even Mongolia, reducing travel time and costs and benefitting from expedited decision-making. The use of advanced technology and design concepts will also help to enhance the art of storytelling when the Museum opens this week, with the goal of leading to a better future. The Museum focuses on key topics such as the Universal Declaration of Human Rights and aboriginal concepts of humanity. The latter is showcased in a unique circular theatre with a 360-degree film. According to Martin Knelman at the Toronto Star: “Winnipeg needed a game changer and this museum could transform the prairie city into one of Canada’s unmissable destinations”. I agree that this complex could become a game-changer for Winnipeg, but Winnipeg’s “can-do” attitude will always be at the epicenter of its game.

Monday, September 8, 2014

When is it Fair to Deny Broadband to a Neighborhood?

Americans in Kansas City, Missouri and Kansas City, Kansas are now using broadband at the kind of speeds once enjoyed only by South Koreans, Japanese, Hongkongers and, believe it or not, Latvians. As customers of Google Fiber, they can buy gigabit services delivering 1,000 Mbps service. That is 100 times the average American broadband speed reported by Akamai in April 2014.

By leapfrogging to gigabit speeds, Google is upending the competitive broadband market in the US. It has lots of help from dozens of municipal networks in places like Chattanooga (TN), Danville (VA), Springfield (MO) and Santa Monica (CA). It’s about time, some would say. But the really intriguing part of the Google Fiber story is not its speed – it’s the way it is being deployed.

According to a story in the Wall Street Journal, the deal that Google strikes with its Fiber Cities has a unique clause: it specifically exempts the company from offering universal service. Instead, Google divides the service area into “fiberhoods” of a few hundred homes and asks residents to pay $10 to preregister for service. If interest exceeds a threshold, from 5-25% of households, Google rolls trucks and fibers up the fiberhood. If not, the trucks say in the garage.

The flexibility to build where it chooses, plus more efficient and cheaper technologies, has let Google deploy service for about 20% less than Verizon’s competing FIOS deployment. Lower upfront costs translate into lower business risk, higher profits and more coverage. Gigabit service costs US$70 per month in Google’s Kansas City fiberhoods, compared with $120-150 per month in AT&T’s Dallas-Fort Worth system.

According to the company, Google conducted preregistration in 364 fiberhoods in the two Kansas Cities and all but 16 of them met the threshold. But, not surprisingly, participation varies by income. According to a survey by brokerage firm Bernstein Research, 83% of households in a neighborhood with median household income of $116,000 signed up. In another neighborhood, with media income of $24,000, only 27% subscribe.

So here’s a question: is Google playing fair? Is Google’s approach just a means for the company to cherry-pick the most profitable customers – or is it a refreshingly new strategy to get ultrafast broadband into the market faster?

Each of us will have an answer. Here’s mine: I think it is a refreshingly new strategy. Because anything that lowers upfront costs tends to lead to lower prices, higher profits and – most important of all – more coverage.

Google’s approach also puts the onus of universal service where it properly belongs: on government as representative of the people. I find that refreshing. Is it not a bizarre logic to require companies to take on money-losing customers as a condition of entering a business? In return for that condition, companies have historically demanded and won monopoly control of the market. And we all know how well monopolies and even duopolies work out for their customers. Encouraging monopoly markets to form is a bit like doing a deal with the devil. It gets you want you want – but at a higher price than you think.

If we believe in universal service, then it is the obligation of the public sector to pay for it. And it is better in the long run to pay for it transparently: through subsidies, through incentives that further reduce the risk of deployment for private carriers, and in some cases by constructing networks and leasing capacity to carriers.

Google’s move is hardly the last word, nor the only way to get more and cheaper broadband coverage. But isn’t it the kind of innovation that deserves fair consideration? Let me know what you think by posting a comment to my discussion on LinkedIn’s ICF Group.